good morning, herb. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching the u.s. equity futures this morning. right now, it looks like we see some green arrows. those dow futures up about about 35 points above fair value. s&p futures are up by 3.3 points. in our headlines today, boeing will be holding its annual meeting today. on friday, ethiopian a lines became the world's fair vifrtier to begin flying 787 ddz dreamliner. it has cost boeing an estimated $600 million. and speaking of the skies, if faa says that it has suspended all employee furloughs. it's expected that the country's air travel system will return to normal. well, we hoped by last night.

congress passed a bill on friday that allowed the agency to shift money within its budget to help the furloughs for air traffic controllers. that was a process that started last sunday, so the whole thing lasting less than a week. two lawsuits against morgan stanley and s&p have been settled. those lawsuits claim they hid risks of investment funds. the companies are not disclosing the terms. joe, i'll send it over to you. >> buying a u.s. contraceptive devices maker. that conjures up all kinds of -- it could be anything, right? i don't know whether it's used by you, a man or a woman. it's called conceptus. >> i believe it's for women. >> i believe it is, too. what would that be like? >> iuds and things like that. it is not a conversation for two

guys to be having. >> take your pick. do you want to talk about this, do you want to talk about the cooperating chief at jpmorgan? but when you need to practice a guy's name because you've never seen it before, you just wonder waited with bated breath -- >> it's ignanio. >> let's let kayla do that story. she's going to. >> good. let's farm it out to someone who can do it. anyway, $311 a share in cash, about 1.1 billion, a 20% premium over the stock's closing price on friday. here we go. >> in corporate news this morning, i've turned this into any serious -- cnbc's kayla

touchy actually woke up this morning to tell us about this. >> the big secret is i was already here. but otherwise, i would have wok woken up. >> you were here friday, as well. and we call her kayla. you don't need to say tausche. >> isignano. he was the cochief operating officer. i know it's a mouthful. but the firm announcing yet that he will be leaving to become ceo of first data. he cleaned up the mortgage unit. about the roles and how they're going to be changing, i spoke with matt zames who will be taking on this role by him. he said basically his job won't change. he was the key adviser to jamie

dimon personally. he overseas. and both were co-coos. the area delegated to him were basically his legacy from a previous role. technology, operations and those will be handed down to paul compton who was named into that job. it's a 12-member seen. bisignano's departure is just one of the latest there. it's an 11-member operating committee. the second thing is what it says about succession. this position is squarely to be a contender to take over jamie

dimon's role if and when he steps down. i'm told the other person who is a contender for that is mike cavanaugh. >> i don't know if joe -- joe, were you listening to that? >> do you want me to do it again? >> hey, kayla, how are you? >> good. >> you're here. what's going on? >> she just filed a report about what happened at jpmorgan. >> here is the thing. >> i knew it was going to be matt zames all along. with his credentials and everything else. wouldn't you think it would be him, that he would be climbing the ladder? >> sure. one is did frank leave on his own accord? >> that's a good question. >> i know he got a better job. >> this job has been open since january. both kkr and first data did know that job was open. but i think because matt zames was given the bulk of the

important responsibilities under that coo job, even though they shared the role, he didn't really have a whole lot of responsibilities at the coo level. i imagine that when it became clear that zames was taking more of the reigns of that job, he wanted to leave, anyway. >> when you think about jm morgan, everybody looks at jpmorgan as taking the what he will aside from a second, most people have a pretty high regard for jpmorgan. the management community is virtually a different group of people. take jamie dimon off of it and you're basically -- it's a totally different team. >> right. >> what should you think of that team? is that a good team, is that a bad team? we thought the 2008 team was good, the wheel team, a little let now. what do you think?

>> they had the former ceo of the investment bank and related to that situation, barry diebo. and also ina drew who ran the investment office. that's three right there. who steps down because of their inter action with that london what he will trading loss. >> that's four. then there's another five. >> right. i think dimon and some others didn't have that information there. i asked marianne about this a couple of weeks ago and she said you can't look at it as a governing body because the majority of them have been veterans. the culture is not knew new to them. i think it is interesting to look at succession because i have to believe and through my

reporting have heard some rumblings about two potential succession plans. i think he ever bank on the street is figuring out who are the banks that are separated and who are the banks that stay together. >> kayla touchy, thanks for that. >> my league today would have been the euro story pinching sales growth and how many companies have had no sales growth. >> but combined with the market being indicated up 40 points on that news. and the second story is earnings growth in china has decelerated. gp watched continues fall through its forecast as the quarter went on. by tend of the fist quarter,

ge's revenue from europe was down 17% after they thought i started down 18% from what it expected. it was broader and worse than we thought. and when it was all said and done, i thought industrial was off a certain amount. it's challenging and it's weird because we awl always hear europe is not going to be what can really affect -- if there was a huge break in europe, that would away problem. but supposedly they're not big enough trading partners. but it can. if it's off 17%, it can. >> and consumer products don't seem to be immune, either. >> what does this say about this austerity debate? now sort of -- >> i saw in -- >> but the conversation about --

>> but i saw it in your paper today in the lead editorial. i it talked about how austerity was hurting everybody, but we have managed to offset with new taxes and investment. do the 350e78 that do the reporting at -- when you write an editorialal, shouldn't you know something about -- to throw in that new taxes were -- >> it's not fair to say that it was in the paper that -- >> but you have to throw in the -- to throw in that new taxes were offsetting the new austerity, when new taxes are the austerity they're talking about. it's all taxes and austerity. >> if i told you that there was a dirchbls between the

editorialal department and the news department, you would not believe me. >> have you not admitted in the past that the editorial department is abysmal in erms the of understanding -- >> i actually disagree. i have not said that in the past. >> it's preposterous. >> find a video. i have never said that. >> you have mixing -- >> i have never said anything like that. >>. >> do you think that the editorialal writers at the "new york times" understand economics at all? >> there's the editorials, tun signed editorialal. then there are people that i think you're talking about which are -- >> no, no, i'm talking about whoever writes them now. dale collins used to be in charge of it now. >> i disagree, plus you're putting me in a stickty

situation as you know. >> i didn't even mention gretchen morganson. >> monday morning. good morning, good morning. >> relax. president obama plan toes nominate charlotte north carolina mayor anthony fox to be the next transportation secretary. an announcement is expected today. if confirmed, fox would replace ray la hood. i don't know if john talked to secretary la hood at the correspondents dinner. he kind of looked ae me like, i know one but i don't know who you are, but i don't think i like you. that's what i was feeling. the funniest thing was when the president said he got in trouble talking about the really good looking attorney general in california and he said, yeah,

some people are really mad. eric holder was mad that i said she was the best looking. and honda is recalling nearly 46,000 fit small cars in the united states and canada. the automaker said it needs to fix a problem in the stability control system. it will allow the car tilt too far before he events breaks. they have a car called the fit? >> yeah. it's a little one. my in-laws have one. >> really? >> honda says it doesn't know of any crashes -- i didn't know what apys was. >> what is that? i don't know, either. >> he was there. his name is psy. >> oh, no, i don't know. >> he's the gangham guy or something.

>> i don't know how to pronounce it, but i know it's p-s-y. >> you do? >> only from seeing it on youtube. >> i that ought it was a misspelling. >> gangham style. that's right. >> more views than any video in history. >> you haven't seen that? >> you give us a hard time about not seeing certain shows. this is the ultimate in pop culture. syria's prime minister escaping assassination attempts today after a bomb exploded near his convoy. state-run media showed video of damaged and blackened vehicles. a syrian government officials said an ied was placed under a car and was detonated as the vex drove by.

now to london where ross westgate is standing by. >> we're down at the session low, 6 to 4 advancers outpacing decliners. the ftse last week was up over 2% in the course of the week. the cac 40 up 0.6%. the xetra dax up 0.25%. the focus this morning has once again been on italy. he's formed a government both from the left and the right. it's got some tech know krats in there and a lot of female candidates, the most candidates in italian cabinets for the record about seven. yields in italy continue to grind lower. 3.96%. we're less than 6 of 30 basis

points away from the record yield on the italian debt. the auction was pretty good. we raised 6 billion across -- we reopened the ten year and the five year, as well. 4.66% was the year in march. and on the five-year, the yield 2.84%. we are looking in some ways a little rich. although the five-year looked pretty cheap compared to five and two. some analyst res saying we might get a spread widening versus shape. the key thing is that we have avoided another election in italy. what this coalition does do, as the main opposition, they won't we involved. depending how this government goes, of course, that will -- may support him a little bit

more. moody's has come out and suggested at some point in the future italy may have to ask for debt assistance. the italian market is the best performer today. so far this year, up less than 2% for the course of the year. back to you guys. >> thanks, ross. coming up, washington watch, we're going to talk to harwood who was pumping up cigars. >> was he? >> was he? i asked him whether he had a child and then i said maybe it would be a grandchild, but it was neither. he just was smoking cigars. today marks 100 days in

president obama's second term and john harwood will take a look at the most important issues. as we head to breaks, a couple of highlights from this weekend's white house correspondent dinner. >> i recognize that this job can take a toll on you. i understand second term, need a burst of new energy, try some new things, and then my team and i were talking about it. so we borrowed one of michelle's picks. i thought this looked pretty good. but no bounce. but the problem is the media landscape is changing so rapidly. you can't keep up with it. i remember when buzz speed was

just something i did in college around 2:00 a.m.

welcome back to squawk this morning. let's go ahead to today's national forecast from the weather channel. alex wallace. that shouldn't be a mouthful, alex, but it is. it's raining here and i guess it will continue to rain throughout the day. is that right? >> we've got a good bit of rain up and down the east coast. in and around new york city, we'll be in and out of it.

nuisance showers. wailt way down through the mid-atlantic. even more throughout the dloins, if you're picking up some of that energy. heavier downpours in this area. but it will be stronger storms. and watching for the potential for torontos. finally feeling like spring here in the midwest. but it won't last for long. by the mid part of the week, big trough begins to dig into the upper portions of the midwest, and with that, the temperatures come crashing down. instead of seeing those 70s and a few 80s dotting the landscape, by wednesday most of us through you to dwrout plains will be stuck in the 40s. into thursday, keeping those numbers on the cool side. so we get a little taste of spring before winter weather

slides right back. guys. >> thank you. >> thank you. it's a different alex wallace, right? >> a different alex wallace than in washington. >> we keep talking about the -- >> the warrant correspondence dirp. >> right. with tom brokaw. doesn't think there's any dignity in it. >> you know what the breaking point was for him. >> kim kardashian. >> i know. that's okay pop they're there. >> i understand. >> there's a different between dig phied and pampas, i think. . >> i understand his point. >> you do? >> yeah. come on, lindsay lohan and kim kardashian sitting in the middle of it? >> why are you judging? >> because it just shows you -- >> well, this is just as many this time.

>> lindsay needs to clean up her act. >> actors and ablth ress have demons. what has she ever done? >> i don't know. you're putting me in a position of which one is more dignified? >> yeah. >> thank you. john harwood joins us from washington. it was not that much different than last year. conan made the point that they don't want as many a listers there and he said, though that's why they got me. >> has becky put her pinky down and stopped looking down her nose yet? >> oh, boo look. >> are you a grandfather? >> no. >> you were just handing out cigars. did you get them free or something? >> no, joe, i drove out to the

cigar store so that i would have party favors for you and our colleagues at the table. >> that was nice. >> gee, did you think i stow them? >> what should we -- that was pretty good dinner. everything is fair game. i thought the president was kind of hard on mcconnell and bachmann, kind of hard on nbc, kind of hard on fox. it was fun, though, wasn't it? >> well, i think the job is try to be funny and he pumped a little -- the bang thing i thought was clever that you showed. >> we haven't shown that where he said i'm getting older, i'm no long ter strapping young muslim socialist. i haven't seen any of the networks play that part. >> i'm surprised. i didn't watch enough tv yesterday. that was a good line. conan had some excellent lines. >> right. >> he was very good.

>> i thought the basketball disaster he had a couple of weeks ago was -- >> are you really going there? >> i'm going there. >> do you know we start with c, but we end with nbc. you understand that, right? >> he took 22 shots on the court with cameras rolling and he made two. he said on the other hand, the people from cnbc said 20 misses, 2 lets, what's your secret? >> well, look, john, there were a lot of jokes to choose from just now. >> they're funny when they hit home a little bit. >> two out of 20 for network tv, it's hard. and what about for featured segment owes "squawk box"? >> oh, yeah, 2 out of 20 would be good.

>> i think ann hits a higher shooting perspective. >> i thaurt it was a tough line. and i thought to myself -- i thought it was funny. >> which one? >> the line was very funny that people tell him you should have a drink with these two, have a drink with mr. mcconnell. the president goes, really? why don't you have a drink with mitch mcconnell. >> but if you really think about the bay that happens -- >> no, that has absolutely no impact on anything. >> john, the best line was the bayner and the president. did you read that? >> remind me. >> oh, the president and boehner are like anderson cooper and rachel maddow. you know exactly where they stand but nothing is going to happen between those two. i thought that was the best zinger of the night. >> you haven't seen house of

cards. >> you have? >> they did a six-minute spoof of the event. >> to give you guys a bit of the arc of this dinner, i've been going there for about the22 yea. when i started, it was getting bigger. it was the kind of thing where initially you would try to take advantage of the governor or some politician that you didn't get to see very much. and you would build up your list of sources. but in the latter part of the 1980s, mike kelly, no longer with us, decided to make a splash by bringing fawn hall, who was oliver north's second to the dinner. that got so much potential was

when the dinner morphed from a political dinner to an entertainment to a slash celebrity dinner. so people started bringing more star power and news organizations started spending money to promote themselves and have cocktail parties and that sort of thing. after 9/11, during 2000s, bush didn't -- he didn't like events like that very much. obama doesn't like them, either, but bush well knows about them. will you go to the white house correspondent with me? when obama came in, there was a lot of electricity, history making, bombs and that's what

tom brokaw was reacting to. it became a complete originally of celebrity spotting and taking iphone pictures with people and it got kind of ridiculous. >> do you miss the good old days, john? >> i don't care for this event very much. i think it's gotten way out of control. i think the comments last year had some impact and it was slightly tamped down. >> really? >> not a lot. >> to me, the only disappointing piece of this is the whole point of this dinner is to raise money for the scholarship. >> no, that's not the point of the dinner. >> aus tebsbly, that's the point of the dinner. that's $300,000. and you think about the millions of dollars that these organizationes and companies and everybody who shows up spends and to think that this all they're doing is taking in a couple hundred thousands for the scholarships -- >> the point of the dinner is to make everybody in the room feel

cool and important. and that's what kind of got out of control. it could know nice if we can take it on the down slope a little bit. >> mr. harwood, thank you vvp for the perspective and snad. >> he didn't give you one. i sat next to you and you spilled wine all over my seat. you owe me a cigar. >> thank you, john. when we woman back, we have got the markets on the mind, the stories likely to draw trading. first, though, one world trade center will become the tallest building in the western hemisphere. the final two secontions of a 4 foot spire is set to take place today. ng them work.

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welcome back, everybody. we have a big week on the economic front. decisions from both the ecb and the fed. plus, a jobs report on friday. joining us right now is joe kinnehan. also, john lonski who is moody's capital markets group chief economist. john, let's start off talking a little bit about the earnings season. it has not been a very good earnings season yet the market keeps pushing higher. >> it's weak from the perspective of sales. the s&p falls a hundred companies reporting thus far show sales growth of 0.1%. that's about as close to zero as you can possibly get. and that is especially worrisome. because if you continue to see

negligible sales growth, ultimately, employment is going to pay a price for that. >> do you think the real problem here is what joe was talking about earlier this morning in terms of europe being so weak and companies getting hit by that? is it the dollar or is it an issue of consumer spending here in america with higher tax increases that have gone on? >> all of the above. this is an economy that simply was not yet strong enough for sizable tax increases. not only the payroll tax, but the higher rates of taxation for income. >> sew, o, jj, you hear things that, how did the market campaign smp. >> they're using every single pullback to buy stocks. to reinforce what john was saying about the 271 companies that have reported so far, what's interesting to me is 69% have beaten on the bottom line. but only 43% on the top line.

so there is concern that, you know, they're doing it by cutting expenses. you can only do that for so long. the companies are really well managed and really lean. but with that being said, if you look at some of the economic numbers, we have the fed meeting starting this week. it seems hard to believe they're going to change policy only because the last month of numbers have really been much weaker than we saw in the previous month. i think there's a lot of concern heading into the summer that although, you know, stock market itself seems to continue to rally, that we are heading to some sort of tipping point. with all that being said, 1600 just -- there's a feeling among the traders here that we're going to have to go and test that on the s&p 500. at some point in the next couple of weeks. >> my point earlier had to do with when we talk about austerity. we -- there are people that say austerity and all they mean with government spending cuts. i'm talking to john. all they mean are government spending cuts. there were al of tax increases

in europe that haven't helped. over here, the thrust of this piece was that in the united states, the reason that growth was slowing again is because we've embarked on this austerity program. i think they were talking sequester. and they said at least congress has done some good things like raising taxes and -- >> that doesn't make any sense. >> that's what i mean. >> that didn't show up until later. >> what we're seeing now is the effect on of higher taxes as they put in as offsetting austerity. >> not a good idea, especially when you have the fed keeping borrowing costs low to provide support to the economy. it makes no sense. why touch monetary stimulus. >> what if he used the tax hikes to do infrastructure investment? >> well, i don't think this is the time to go out and have tax hikes. my sense is that what you want to do is you want long-term

deficit reduction. you want to focus on those entitlements that are related to people from my generation, the baby boomers, that's going to be growing like crazy in the not too distant future. >> are you making a distinction between taxes and budget cuts? ultimately, in some ways, they turn out to be the same thing. >> my question to you is if you're not for tax hikes -- and i'm not suggesting you should be -- are you not for cuts to the budget, as well? you have to slow the pace of government spending over time. i think there's no getting away from that. >> i'm not saying it shoul, i'm just saying that that's the outcome on both sides. >> given this is the weakest economic recovery since the second world war, you don't really want anything in terms of fiscal austerity. >> you want no cuts and no tax -- >> just go ahead and you want to plan a slower rate of growth by spending as we move forward. i don't think you messily want

to impose it right now given the fact that this is the weakest recovery since the second world war. >> i used to say that, too. if you're at 25% of government spending and you know both are negative for the economy and you know sooner or later you're going to have to slow something, if you're going to do something, you ought to slow spending. >> but the point is -- >> i know. but i'm saying if you've got to do one or the other -- they do. but that separates the two sides in this whole debate. the other guy thinks, look, we have to slow government, anyway. we night as well do that fist. >> perhaps it's the mistake they're making in europe. >> but the question is, how much of this is in the context of tax hikes versus how much is it in the context of budget cuts? >> when most people talk about austerity -- >> and more tax -- >> and you do both? is there a way to --

>> the weakness of kwon assumer spending in the first quarter, retail sales up less than 3%. >> that's the payroll tax. exactly. not just budget cuts. >> thank you for coming in, john. j.j., thank you for joining us and we'll talk to you again soon. coming up, what happens when the government goes belly up given the conversation we just had. municipals and counties from coast to coast facing the harsh reality of bankruptcy. we'll talk to the mayor of birmingham, alabama, ask ask him how he's weathering the storm in his home state. it's monday.

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welcome back to squawk this

morning. alabama's jefferson county suffered the largest municipal bankrupt on record in november 2011. what's been going on since then? how have towns within the county fared since? joining us now, william bell, the mayor of birmingham, alabama, which is in jefferson county. we thank you for come up to new york and waking up early. >> thank you for having me this morning. >> first of all, let's make the distinction. jefferson county filed for bankruptcy. birmingham did not. and right. >> what does that mean the in terms of how you operate the city? >> first of all, we had to go through this process of making sure that everyone understood that it didn't affect the city of birmingham itself. jefferson county is a separate municipal entity from the city of birmingham and the city of birmingham has its own financial resources. so we've had to constantly fight that battle to let people know, it is not the city of birmingham that a separate governmental entity altogether.

>> we constantly have a debate around the set we were just having about austerity, cuts, versus tax hikes. what's going on in birmingham right now and how is that debate played out? >> well, 2010, when i became the mayor, it was probably at the height of the recession. and we were spending somewhere in the neighborhood of about $2 million a week. we had to cut that in half to slow our spending down. but being a city, you just can't cut spending and then expect the city to move forward. so we had to look at other opportunities to increase jobs in the area, to make sure that the vitality of the city still moved forward. and that may cause a lot of conversation among people, what's the best way to do that. as you know, in tough times, people look to the government to come up with ways to stimulate the economy, create those type of jobs. we take it upon ourselves to look at various ways that we can accomplish that goal. >> so what did you do? >> well, first of all, we

started looking at ways that we could create jobs and we announced who was going to build a hotel in our conviction center, to expand the number of people coming into the city, to spend dollars. then we looked at building a new baseball stadium which, again, would bring people in. >> when you're cutting services, did you say you see to cut services in half? >> no want we cut spending. >> did you find a lot of fat to cut? >> i wouldn't call it fat, but oftentimes over the years you had a necessity of things that's not essential, picking up garba garbage, picking up police and fire protection and the basis services that city allows. some people call it fat and some people called it noncent centec services. >> what kind of stuff falls into that category? >> you may have arrangements where printing, printing outside material for organizations that did business or depending upon

the city you have to cut that back. you may have situation wres instead of having ten people in a given area of work, you only need five. and we relied upon our ability to allow people to transition out of government through retirement. we have what we call a voluntary retirement plan that was put in place that we reduced the size of government probably somewhere in the neighborhood of about 10%. since that time, we've also had a bond issue, like i said, for $150 million that would help stimulate growth in our city, as well. >> so we'll quick after doing all of that, what happened to the unemployment picture? you had 7% now, but where was that two years ago? >> it was slightly higher. we always seem to be at or slightly below the national law of numbers. we're still at that same position. we're doing quite well. in fact, we've created about

3,000 jobs in the metropolitan area. 2,000 of those jobs have been in jefferson county and the bulk of those have been in the city of birmingham itself. so we're moving forward and we're appreciative to the bond ratings that we've received which has been aa. >> aa. >> when you compare that to what jefferson county is going through. mr. mayor, thank you for coming in this morning. >> thank you very much. when we come back, we're going to take a peek into sac capital. the embattled hedge fund now faces another issue. kelly has the details right after this. [ male announcer ] there are people who find their own path.

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welcome back to "squawk box" this morning. sac capital is prepare for another key redemption date. good morning. >> good morning, andrew. it's been a tough year for steve cohn. during sac's first quarter redemption the firmlost. black stone group pulled out money as well. sac said it would allow them to wait until july and get back all by the end of the year. historically they have kept

investors happy without performing. 8% the year before. but this year the returns are only average. meanwhile, the league picture is worsening. veteran sac trade erudited on insider trader. in 2008, a lousy year. sac says it has a stable capital base. as the firm would clearly prefer that the external investors remain, if they leave, they don't think it would look substantially different. >> only one question i have. the five-year statute of limitations runs out on steve cohen in late july. >> late july of this year. >> so we're three months effect effectively. do you think he gets prosecuted?

>> do i think steve gets prosecuted? >> yeah. >> i don't know. but there are two schools of thought on that. one is that the feds have been nosing around since 2009 and they don't have the good yetment the other is, well, they've been looking four and a half years. obviously they must be building a case. they do implicate steve cohen. he apparently knew about the stock sales for which he allegedly received insider information. they had other positions which mooted any gains. sac is tell the sec there were no gains. the key phone call -- >> no thanks. >> almost irrelevant. >> this phone call that occurred was taped. we don't have any wiretapping. we don't have any e-mails. the crucial information was 20 minutes on a sunday. maybe martoma has a compelling

memory. maybe he took notes. it may be hard to put it together based on that missing phone call. >> you know, it was interesting that the point you showed just for the performance, that's versus the hedge fund industry. >> that's right. that's versus the average. it is probably a fair comparison. that tells you the long side. yeah. they have massively outperformed for all along really. but they had a big exception in 2008. right now they're very average. there was a resume they are staying liquid. they deny it. i hear they're keeping more cash on the sidelines. >> kate kelly, thank you. >> coming up, a top executive change at jpmorgan and boeing's plans to fly high. stay tuned. "squawk box" will be right back. ♪

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earnings. the fed and jobs. we get you ready for the week ahead. and where you should be putting your money to work. >> find out how the smallest of the big three is fairing and whether or not the company will push to go public. >> sandy six months later. will they be ready for summer season? we'll head to seaside heights. the second hour of "squawk box" gibbs right now. good morning, everybody. welcome back to "squawk box" here on cnbc. i'm becky quick with joe concerner and andrew ross sorkin. dow up 33.

s&p up by 33 1/3. significant events coming up. big highlights a two-day fed meeting and the april jobs report on friday. the fed will be issuing its latest statement on wednesday afternoon. also, the the april employment numbers come on friday morning. and this morning we have gotten big news too. behr is buying conceptus. it represents a 20% over friday's close. boeing dreamliner is back in service. our cnbc's phil lebeau will be with us. commercial air traffic began

sunday 1867 delayed flights and 41 cancellations, less than on the first day of furloughs and below the 30-day average. we're already below the average, which tells you what the average is. 31 delayed. faa began returning staffing levels to normal. they gave the department of transportation more budget flexibility in the face of mandated across the board cuts. and then the president, though, has yet to sign the bill into law. i think they said he would, which was backtracking on the idea of getting rid of the sequester as a whole. >> the other question is where they were going to come up with the money. would it be from within the budget of the faa or what the administration originally wanted. they were saying you can't do that because you're taking wartime spending -- >> i wouldn't do it. >> all my planes on friday?

how did you do? >> beautiful. no delays. i was probably on four different planes. no delays. >> incredible. normally they're not delayed that much. that can be tough. >> i was on a delta shuttle. >> even you do that. not only do i do that, i don't know how i felt about it. bill o'reilly was a very tall guy. >> he is tall. >> he is sitting in the back of coach on the plane. >> i would like to see the stewardess do something wrong with him, the flight attendant. have you seen that tape? >> yes. >> do it live! >> wouldn't you like to see him get p.o.'d on a flight? >> do it live. do it live. >> he was on inside edition in 1994. >> you do look like a rescue dog. you know what i mean?

>> like a res cow dcue dog that been abused. this is not as bad, is it? worse? >> it's complicated. the co-chief operating officer of jp will now become chief executive of first data corporation, owned by kkr. matt zames who shared the job with frank will be sole coo. the 9th top executive to lead the operating committee. that is probably the bigger headline in all of this because the firm's top management has significantly rolled over over the past 12, 18 months post this whale situation. >> was that him? i believe that was matt zames. a prime minister escaped

assassination in damascus. you an ied was placed under a car that was parked on the street and detonated as the prime minister's convoy rode by. >> after a jobs report on friday, a fed meeting, quarterly results, including numbers from facebook. our guest host for the next two hours, robert kaplan. former vice chairman of goldman sac. he is author of what you're really meant to do. road map for reaching your potential. and david steinberg, founder of dls capital management. how are you doing? >> well. how are you doing, jeff? >> where are you based? >> chicago. >> robert is going to be here -- yeah. let me just start with you on what you think of this story in

the journal today about how weak revenue growth has been. is that an issue? has the market gotten ahead of stkpwhreufts we're not going to see any growth. between deficits, titlement expenses and what the government is doing in terms of regulation. forget it. you will see a 1% plus or minus growth rate. so weak revenues, they're tough. i don't know if "weak" is the right word. they're slow. they're going to be slow. we have people in the marketplace due to no yield in the fixed income markets. they're moving themselves that can have a better chance at growth. if you look at the stock market, you probably have full valuation in a lot of the staples. they seem to go up every single day. i have seen a bifurcation with the the sick cals and commodity

related companies are still a value. over a longer road, you will have better growth in emerging markets. that being said, you have to figure out how you catch that as time goes on. >> i thought it was three straight. would it be four straight if we swoon in the spring? >> i agree with everything david just said. i think the market is out ahead of itself. >> the economy, we were getting -- >> 2% to 3% growth. and we'll be at this the next few years. >> 3 is different than 2. >> who knows? the point is it's going to be sluggish. this against a broader back drop. we have a massive deleveraging going on in the western governments and it's going to take years. the u.s. government hasn't even started. we're still increasing our leverage in the united states.

deleveraging by its nature creates a head wind. the thing offsetting it is the fed and ecb. this is going to go on several more years. >> are we in the united states in a period of austerity? have we started? >> not really, no. the sequestration was the first mini step. >> what about raising taxes. >> the big thing was the payroll tax. >> it did go up on the high end. >> we're tighter a little bit at the state level. we're definitely in a period of austerity. i'm afraid we've got more tightening probably to come. it's going to be done in a balanced way. the fed is going to keep easing money for longer than people think to help offset it. i think the sooner we get this debt on a different trajectory the sooner we get back to growth. there's a reason to move it along. we're in a period of tight fiscal conditions here. >> you're advocating, though, we should cut the budget right now. >> we're not going to cut the

budget. we're going to slow the rate of growth. worry not going to cut anything. even the paul ryan budget, all it does is modestly cut the rate of growth. >> what about the long-term health care issues, social security and all kinds of problems that are out there. >> i think we'll look back 10 years from now if we don't take this opportunity to do some restructuring of social security, our health care system and also medicare and medicaid i think will regret it. it's painful, but it's not very painful if we do it now. remember, everything we do on social security, medicare, medicaid won't even take effect. >> it shouldn't even effect the people that are now. there are going to be changes that are coming. if we're just at the beginning of austerity, what does that mean for the markets the next five to 10 years? >> it will depend on alternatives. say the bond market stays at

these low levels and the fed continues to keep a cap which is unprecedented. keep a cap on rates, investors are going to look for alternatives and say, where is the growth? right now they're not in a where's the growth mode. they're in how do i not lose money? over time it many morph itself looking into growth. >> what percentage is your portfolio right now? >> i don't like at the mail blacks i look where the revenues are coming from. i would say 70% i'm trying to get some form of exposure. two-thirds comes from japan, the united states and europe. okay. but a third comes from emerging markets. 10 years ago it was a fraction of that. 10 years from now, emerging markets will be the driving

force. >> but that's really important. you can play that through procter & gamble, an american company instead of saying i'm betting on emerging market stocks. >> if you think about it, you have a lot of risk unless you have the right partner in a lot of these countries. so if you get into the proctor & gamble or commodities side of the business because you think they're using copper or what have you, there's different ways to skin a cat to get that growth. companies are growing faster. >> all right. >> i like that term "balance." you used it to. we have to use a balanced approach. everybody agrees with balance. is there anyone who would say we don't want things to be balanced? we do want growth. if we do need to do this budget, narrowing the deficit, if we do need to do it, are you advocating we go even higher on

marginal rates or higher in terms -- should we do it on the tax side or the spending side. >> we have to do a whole series of things, including slowing the right of growth of entitles. i don't know how much more there's left to do on revenues. one other thing that has to be done, we have to invest in infrastructure. >> maybe with public/private u partnerships. >> we need to repair the infrastructure. we're talking air traffic delays. the nation's highway system, air traffic, all the things we do are critical to our productivity. we can makin vestments in those and i think we should. >> it's hard. because unless it's iron clad where the money is supposed to go -- >> we're going to have to get the stimulus in 2009 give infrastructure a little bit of a bad name because of where all

the money went. we have to get over that and still try to do infrastructure spending. >> he's right on the money. look at the breakdown. i don't think there's anywhere -- >> then we have to cut somewhere else. >> it's not a perfect system. >> some people as entitles grow they want to pay for growth in entitles. >> at the government level we may have to get more sophisticated in that there are transfer payments and investments, the same way for a company. we don't think we're throwing money away when we make an investment on something that will have a sustainable return. >> we account for it differently too. that's part of the issue. >> you're right. i agree with you. >> mostly doing transfer payments. we haven't done as much investment. >> all right. david, thank you.

you'll be with us, robert, for the rest of the -- >> a quick break. if you have comments or questions on anything you see on squawk around the table, shoot us an e-mail, follow us on twitter. still to come this morning, six months after hurricane sandy, how the "jersey shore" is fairing. a big day for boeing. holding its annual meeting in chicago. the dreamliner expecting to be the big focus. phil le low will join us after the break with all of that. [ male announcer ] ok, here's the way the system works. let's say you pay your guy around 2% to manage your money. that's not much you think. except it's 2% every year. does that make a difference? search "cost of financial advisors" ouch. over time it really adds up. then go to e-trade and find out how much our advice costs. spoiler alert: it's low. really? yes, really. e-trade offers investment advice and guidance

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welcome back to "squawk box" s. checking the futures to see how the markets are setting themselves up. dow looks like they open 43 points higher. s&p over 4 points higher. nasdaq up 8 points. >> our phil below is doing double duty today. he is on boeing watch as the company gets ready for its annual meeting. phil, the big news is that the dreamliner is back in service. >> yeah. we'll talk about that in a little bit, becky. the first commercial flight on saturday. ethiopia airlines on a flight to kenya. it was uneventful. we'll talk about that in a bit.

first, i want to touch on chrysler earnings. seven of the last eight quarters they reported a profit. things are starting to change a little bit for the chrysler family. there will be reporting a profit in large part because sales outpacing the industry. only 7.6 versus the industry at 6.4. sore sergio, fiat will try to increase its stake. it wants to buy all of chrysler and to turn ipo. for fiat this is critical because they need the cash as they try to shore up balance sheets. europe is killing these guys. chrysler so critical for fiat. the annual meeting will be coming up a little bit later on chicago. for the ceo of boeing, a few

questions about the dreamliner no doubt. but a lot of other questions as the country has weathered this storm better than many expected. this is a shot of what's happening or what happened over the weekend. ethiopian airways the first commercial flight since the battery fixed for the 787 dreamliner. there's 50 of them already out there that ther had he retrofitting the next three weeks. many questions at the boeing annual meeting will likely involved not only happened with the dreamliner but the prospects as they try to put that behind themselves and move forward. we will be at the annual meeting a little bit later on today. guys, back to you. >> phil, thank you. we'll be watching. see you soon. a monument al moment for the big apple. details after the break. has it been 10 years? i thought 10 years since you

started buying music that way. did you know that? >> i am aware of that. >> not since you started listen to go music that way. >> yeah, 10 weeks. and ceo of phillips electronics and basf will join us in a couple minutes. stick around.

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welcome back to "squawk box". 1 world trade center is set to be the tallest building in the western hemisphere. the top is set to be raised to the top. that's happening today. once it is completed with an installation of a six ton stainless steel beacon it will make it the symbolic height of 1,776 feet. it is a busy week on the economic front. friday's jobs reports.

we have personal income and spending. economists are looking for personal income to have risen 0.4%. it all leading up to the big jobs report. that is friday. yes, it's here again already. >> it's amazing. >> it is every four weeks. >> it is. >> not every four weeks. every month. >> the companies do it four times a year. every three months. >> and don't forget, central banks, a couple key policy decisions. ben bernanke and company keeping the current pace at 5 billion a month. in europe, a lot of speculation that the ecb will cut its money tear policy on thursday. the one thing that happened we went back to no tapering.

>> inflation has dropped off the plan et. >> you can argue both mandates tell them to ease. you have a lot of cover. >> robert, no way, right? tapering is off the table? >> i think so. ben bernanke did his thesis on the great depression. and those lessons will stay with him and the group for a long time. >> if you have a comments or comments about anything you have seen, e-mail us at squaw squawk @cnbb.com. >> ceos of phillips electronics and basf will talk about why foreign companies are looking to open up shop here. it's been six months tot day

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welcome back, everybody. we are just an hour away from the first economic report in what will be a busy week. march numbers on personal income and spending at 8:30 eastern time. 90 minutes later, pending home sales from the national association of realtors. president obama will be nominating charlotte, north carolina maran thoepb fox. the official announcement is expected sometime today. honda is recalling 46,000 honda fit vehicles. 2012 and 2013 models affected. it is an issue with the electronics stability control

system. this morning we are talking with two ceos about eup vesting in america. basfceo. and phillips electronics north america. gentlemen, thank you for joining us. we have been trying to get a feel for something we talk about all the time, investing here in america. why companies from overseas try to invest here, what they would want to get out of it. tell us how you see this whole thing. >> for phillips and many multinationals, the environment remains attractive to other countries. for us being in the medical business, the aging population presents another opportunity. we have a predictable intellectual property system that went through revisions last year. they all create a favorable environment for growth, which is what we're focused on relative to other parts of the world. >> we spend a lot of time talking about the problems here in the united states and what we need to do to fix things. but from somebody from outside, the the perspective is this is a good market and a place you

would like to be? >> as the ceo of basf north america activities, it's a big market. 16 billion on gdp. basf needs to play where its customers are. >> what have you done in terms of investing in the u.s., plants you might be putting here? >> we have built a business to go back 20 billion of sales. 80% of that is in the u.s. we have invested on an ongoing basis. plus a significant amount of acquisitions. we would spend about in the magnitude of 7 billion or acquisitions. >> how many employees do you have in the united states now? >> we have in the united states roughly 15,000 employees.

>> greg, how are you about? >> 20,000. we will add 3,000 to 5,000 a year. it is very important to us. >> when we talk about the problems we see coming from the cup's economic perspective, what do you see? are there problems there? are we getting it wrong when we talk about the problems we see? >> there's a lot of rule making in washington the last four years. as long as we have enough notice, we are able to influence that. we need greater harm moneyization. >> have you slowed the amount of investing that you have done

because of -- when you talk about obama care, it has been a big issue. has it changed your perspective, slowed anything down or does it matter? >> it slowed down the sales due to uncertainty in health care providers and what they can pay for and what happens with medicaid and medicare spending. to really deal with long-term demographics. >> you mentioned immigration, visa issue and engineers. >> yes. >> we have people -- companies constantly talk about that. are there really not enough engineers in this country? you can't find them efficiently? what is the real problem? >> there are not coming through the programs. >> you cannot find them for your specific issue? >> we can't find enough.

it is very, very difficult. >> it's a great career. but you go back. like when the president said you have a drink with mitch mcconnell. come engineering, any of those things. i wonder how do we get people to realize what a great future they would have if they boit the bullet. how do we do it? or do we let all the foreigners. >> i've been told, and i could be wrong on this, there are two levels. there's very high level engineering and lower level engineering. >> are you talking train engineers? >> no. there's a distinction of what's going on. >> we will certainly have a ph.d. level and college graduates.

>> we face the exact type of problems. we have the same problem with respect to our plant workers. what we need is well educated workers in the chemical plants. and there is certainly a bottle neck there. it forces us to advance at a level slower than what we could do. and with cheap natural gas, there's an awful lot of investment coming announced. my view is not all of that will be implemented. we can't implement all of that. >> that a problem you think, hans, the infrastructure. it's not there to allow more

investment as well. >> if you look what happened with infrastructure in the u.s. over the last 20 to 30 years i think the u.s. was leading 20 to 30 years ago and has not invested enough in infrastructure. you see how the porpbts are connected to railways, streets, bridges. for a company like us we are importing roughly 4 billion goods a year. >> where have they kept pace? where is the best infrastructure today? china? >> they fully understand they need to invest in infrastructure in order to attract investment. >> when you look around, does that play into your decision as to whether you invest in united states, china or elsewhere? >> it plays a role. like raw material, labor costs plays a role. again, what i said in the

beginning, we invest where our customers are. >> greg, how about you? what would you like to see more of? >> harmonization. we're in the lighting and health care business. if we have to maintain multiple supply chance and product safety, testing standards across the world, it slows down the innovation cycle. >> how does our compare? >> ours are more rigorous. too rigorous if you take an energy star certified appliance, for example. it has to be retested every year, believe it or not, even if it's the same product, same product number. that doesn't make a lot of sense once you hit the hurdle. there are ways the government could audit us and give us blanket authority. and that's extremely important. the country is benefiting from

natural gas dividend with falling costs i think for hans's business. for all of us, they provide fundamental growth. >> hans, you look at the keystone pipeline. what do you think -- its likelihood of success. >> infrastructure is extremely important. >> we don't want the private sector building. why want that? we want to talk people and get the public to do it for like 10 cents, right? this is fully private sector funded, keystone and yet we're not doing. do you scratch your head? >> occasionally i do. we have to make sure we have the right infrastructure in place to attract investment. this is not only keystone. you can look at gas pipelines that need to be built in order to be able to ship the gas from the place where it's produced and consumed.

>> so much for peak oil. has anyone said that in the last two years? i don't think they have. >> have they? >> no. but i think that's the nature. there's more oil and gas than you expect. >> hans, greg, thank you both very much for coming. we really appreciate your time today. >> thank you very much. >> is it three years? i wonder how much calculus you need. you need physics. one year calculus, college level, is no fun. then you go two or three. and then if you go chemical engineering, that's even worse. >> my brother is an electrical engineering. >> that's horrible. i used to look at what my roommate was studying. it was like greek. >> is it the rigor, the study or compensation? why aren't people going into it? >> probably the rigor.

we don't talk about it a lot. we talk about the white house correspondents dinner and the kardashians. >> i want to recuse you from this whole conversation. here's what struck me over the weekend. i was reading -- why, i don't know but i was reading the op ed pages. what's causing the swoon. and i just got to this one paragraph. and i made this. and i'll show you why, becky. because i'm not talking to andrew. it said republicans insisted on austerity. the administration, though, has tried to help by adding new taxes. and that's the part that was to me either was dishonest or the people writing it don't understand economics. now, i have gone in and looked at the new york sometimes. i found one person that does

have an economics degree. terry tank. oh, i'm sorry. a lot of history pages. history pages. >> we're talking to a poly-sci major. >> anyway, we have a harvard professor. and i talked to you a little bit. but how do you characterize that statement? >> i don't understand it. they might want to rewrite that sentence. >> what was interesting, though, is earlier in the piece they talked payroll tax cuts and say that was a problem. that they got rid of payroll tax cut. >> it would fund social security. >> austerity is the blend of the two. they are trying to talk about things that hit the low end.

payroll tax cut. >> that's not necessarily -- but we know it's not just budget cutting, correct? >> correct. listen, my fear is this. this deficit doesn't feel that bad. pause interest rates are so low. >> right. >> mantle if we had, quote, unquote normal interest rates, 5%, 6%, 10-year. we would be taking much tougher action. and we shouldn't wait for that. we should do some incemental steps. it doesn't need to be earth shaking but we need to make sure we don't go where rates go higher. >> the pressure has been taken off. people are now saying, look, we're doing a lot. what we have done already should be sufficient. and when you look at how weak

the economy is, that can certainly pick up some traction. >> it is. the part they can work, on which i think would help a lot is entitlement reform. it won't effect spending but it will get us on a better trajectory. it will do a lot for the confidence of this country. not to say if you did have an economic degrees. >> a lot of history pages. come back. what was your major? >> it's safe for me to come back? >> it is. >> i studied journalism, communication sps media. >> a lot of journalists here too. writing about science. it is not safe for me to come back. >> coming up, disruptor, with some of the biggest tech ipos back in 2000. find out who is he backing now. and the next big name in tech coming up. all right. checking the futures this

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our next disruptor is the banker who led some of the biggest ipos in tech. what does he see coming up as he starts his own company. co-founder of sherpa. good morning, scott. we have another goldman man at the table as well. maybe we can have a conversation about that in a minute. i wanted to start with facebook and then some of the investments you're making. they are coming out with earnings. i'm sort of curious when you think about that company, you did take the company public and where the stock is now and what it means in valuations in the valley. are you satisfied with where facebook is right now? >> look, i think facebook is an amazing company, no question about it. as we all know, these are marathons, they aren't sprints. if you look at the last 10 ipos it's a coin toss. half are above and half aren't. and i think over time we're

going to see companies like facebook that have truly differentiated assets. in facebook's case, it's the social graph, the connectivity over a billion people that nobody else has. those differentiated assets are going to play out. they will play out both in the consumer experience as well as their ability to make money from that. >> how do you see the evaluations in the valley right now? when facebook came out, zynga was hot. linkedin had a nice run. they have come back a little bit from what i understand. >> that's right. we all know it's about growth, examine top line growth. if you can demonstrate you have the ability to grow the top line the next three to five years, investors like it a lot. as soon as they don't believe in the ability to drop type line growth, it falls to the floor. that ratio of growth rate to the

multiple. they are trading a little over one times pe to growth. compare that to yahoo!. what does that say? it says there's a greater belief in facebook's growth rate. >> scott, you just started a new firm. you call it vc but it's not a " "v". >> there's no question that there's a lot of money in the valley. there's a tremendous amount of innovation. i'm blown away with the new company, i meet, the new entrepreneur. >> give us examples of some hot stuff we should be paying attention to. >> there's a couple big trends we're seeing that are defining the investment landscape for us right now. one big theme we're seeing is the excess capacity in the system being absorbed by technology.

so what does that mean? it means taking drivers that drive town cars and finding a way to utilize them more effectively. ie, uber. and this company called muntry. what uber did for town cars muntry is doing to chefs. a serve a chef-prepared meal. it's like having a private chef in our own home. it organizes these chefs that aren't doing a whole lot during the day and allows them to go direct to consumer at a price much lower than a restaurant and the food quality is much higher. >> why would chefs do that? it seems like you're selling your services so cheap at this point? >> the chef? >> yeah. >> well, no. the chef now has a direct

relationship with that consumer. if you're paying $12 of a salmonen tray, how much goes to the chef? not a lot. if they can prepare directly for the consumer, you basically cut out a tremendous amount in between. it's very empowering for the the chef. it's very empowering for the limousine driver. >> one final question. if you're not in the venture game and you're watching this and you somehow want to invest in some of these companies, is there still a way to do it? >> the platform company. it comes back to yahoo! google. ebay, amazon. these are the companies that a lot of these innovators are doing to access consumers. so the barriers have been broken down. it used to be you only had a handful of concentrated distribution. now you have multiple parts to

consumer. >> we have mario battelly. is he on your circuit yet on the muntry? >> i don't think so. we'll have him >> up next, garden state's recovery from superstorm sandy has been a tough one. we're going to find out how seaside communities there are making out six months after the storm. bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon.

welcome back, everyone. today marks the six-month anniversary of super storm sandy. mary joins us from seaside heights. how is the progress there so far? >> well, things in seaside heights look very good. the boardwalk will be reopened by summer. 40 of the 42 hotels opened before sandy will be open by memorial day. 70% of the rental stock is available as well. efforts to rebuild and reopen by memorial day have been hampered by a slow cleanup and also contractors are dealing with increased demand. slowing the efforts and in turn other tourist destinations. vacationers unable to rent are unsure of the state looking to other destinations. from lake george, to delaware, a leading indicator of reservations and rentals. for example, on cape cod in the islands, we need a vacation.com

said rentals are up 6% from last year. martha's vineyard chamber of commerce said inquiries are the highest in seven years. they're up double digits in hehobeth and dewey beach. sandy damaged thousands of rental units and caused $382 million worth of commercial damage statewide. with repairs sluggish in some areas have few houses to rent right now. damaged businesses could struggle to serve those that do. all of this clouding the outlook for the $38 billion tourist industry, the state's third largest. it employs a quarter of the state's private is sector workers. as i mentioned, not all areas have been impacted. cape may, little damage done by sandy. with the summer season upcoming, the the state plans to launch an

ad campaign to convince visitors the shore is open and ready for business. >> thank you for that report. coming up, serving up an economic recovery. the state of the consumer. food for thought from mario battelly is ahead. the act of soaring across an ocean in a three-hundred-ton rocket doesn't raise as much as an eyebrow for these veterans of the sky. however, seeing this little beauty over international waters is enough to bring a traveler to tears. we're putting the wonder back into air travel, one innovation at a time. the new american is arriving. oh, boy. [ groans ] ♪

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economic data and the central bank likely to move markets this week. we will break down the week's big data release leading up to friday's employment report. >> the men behind the italian marketplace and bubba restaurants. celebrity chefs take us inside the urban cuisine industry. no reservations required. >> breaking economic data. personal spending will be hitting 8:30 a.m. eastern. third hour of "squawk box" starts right now. welcome back to "squawk box" here on cnbc. i'm joe kernen along with becky quick. robert kaplan professor at

harvard business school and former vice chairman of goldman sachs. i'm gratified. that river makes all the difference in the world between cambridge. >> it makes you feel better, the moat? >> there are a lot of free market capitalists. >> there's a few. >> there are? >> there are. >> they teach economics over there. >> yeah. they are all covered up. sunglasses. they don't want anyone to see them. >> the other gentleman, we had a couple guys on from harvard. >> let's get you up on some of the headlines. $1.1 billion or $31 a share. joe, that is for women not for men.

conceptus. >> i looked it up. iuds? >> it's something they put in fallopian tubes. it's not in the uterus. it does not use any hormones but supposedly a permanent contraceptive. >> until you take it out? no, you can't take it out. seemed difficult to take out. anyway, we can talk more. >> you look uncomfortable. it is just medicine, andrew. >> it's not medicine. >> but we're talking health issues. there's no reason to feel uncomfortable. >> any time there's needles involved. >> oh, is it needles? the price of the maker is representing nearly 20% premium over friday's close. the boeing dreamliner is back in service. ethiopian airlines flew for the jet since its grounding. separately, the fa has now suspended all employee furloughs

and expects the air system to return to normal by last night. if you're getting on a plane today, it should be -- well, there may be delays. not as a result of this. congress passed a bill friday allowing the agency to shift money to hall furloughs of air traffic controllers that started last sunday. a big check on the market. dow looks like it will open 50 points here. s&p 500 always over five points. overseas in asia, a little bit of a mixed picture. australia and bottom boy are both up and in europe. we should say there are a couple of countries that are closed. >> japan was closed. they have something -- it's a holiday to honor the emperor. 60 some years in china. >> and the holiday inn japan? >> i don't know. >> we will go back on that. >> let's talk about washington news as well. president obama planso

nominate anthony foxx to be the next transportation secretary. an announcement is expected today. also, another expected has left. the co-chief operating officer. and matt zames will become the the sole coo effective immediately. and a big week for the economy in the markets. adp employment report on wednesday heading up to the big week that ends with jobs report on friday. joining us right now for a preview of what's to come is drew mattis at ubs. and michelle gerard, rbs chief economist. we have been talking about growth and the problems with

grow. you're feeling good about where growth stands? >> yeah. from the q1 data is a disconnect between deposit spending and what was reported in terms of government contribution and gdp. we expect it will all get revised away. this is the first estimate. there's a lot of estimates that go into the estimate. in terms of second quarter we don't think it is as big of a deal as everything think it is. the main reason we don't, when the pain hits, people find a way around it. furthermore, the other thing people tend to forget, because you cut $85 billion in budget authority doesn't mean you have that in cuts. this is washington. this isn't the real world. real world cuts is half of that. >> michelle, where are you in terms of second quarter growth estimates in. >> we're around 2%.

i don't disagree with anything drew has said at all. i think first quarter numbers were better. when you look at private domestic demand we had a much healthier first quarter print than i would have expected. but i will say we did soften throughout the quarter. that trend was evident in, not only the payroll numbers but the spending numbers. it tends to set you -- a arithmetically it makes sense. >> drew, if you think growth is stronger, we have been talking about the fed meeting and thinking there's no way tapering the spending program is going to come up at this meeting. if you think growth is 2.9%, thank you that's a conversation they had around the table? >> no. they disagree with everything i say. i will say this, though.

one of the things they might find themselves thinking about. it seems to be what's happening between tax increases and even the modest amounts of cuts in the sequester, all of a sudden they will be buying an ever larger percentage of new issuance. they will have to cut back on the amount of purchases. >> that's an interest point. if they keep it at $85 billion they are in effect ramping up. >> this is the big debate between flow and stock. it bores the heck out of everyone else. >> oh, good. let's talk more about it. >> better thanky said if he takes out a certain amount of debt everywhere, that's the the way his policy works. but he's increasing combination as the deficit falls. it links fiscal monetary policy. >> so it's an imperfect science to say the least? >> yes.

it's an imperfect science. bernanke stuck himself in a bit of a bind. >> michelle, do you think the fed should continue spending at the rate they're spending? >> i don't think so. because i do think that the efficacy is very much in question. and i fear the future cost. but i guess this is an interesting point, right? when you look at what's happening not only in terms of the employment situation, the fact we're not getting the significant incident provement that the fed wants to see, how we're looking at low inflation rates. some people will be waving the flag about the risk of deflation. so the thing here is is everybody is thinking maybe the fed will buy for a lot longer than we think at this pace. the idea they're taking a greater share or just? general the cost, the concern about cost really begin to elevate as the balance sheet

grows and the fed thinks about cutting back on the pace of purchases not for the economic reasons but because of these other issues. that is something that would take the markets by surprise. i don't think at the moment that's on the radar screen. we will see them tapering at the end of the year because they're concerned about the size of the balance sheet even if the unemployment rate has come down much. >> i know they were trying to lay out a lot of goals and setting up exactly what the policy would be. my concern has been that they have painted themselves into a corner by telling everybody this is what it will take before they change. do you agree with that? >> the corner i'm worried about is less goals. it's how they unwind all these purchases. >> when you start going the other way, everybody knows. you don't want to shock the

market. i could see the fed trying to slow this down so they slowly get out. they don't want to disrupt the market on the way out. maybe years from now they have to unwind this. >> does it matter if you taper or get out entirely? doesn't the market read it the same. >> as transparent as they have been i think they will be muted about how much they're buying. and they do report the facts after they have done it. i would guess they will be a little muted about how much they're buying and when they taper i think they're going to under play it. >> like not tell us how much they're buying. >> they have to tell us. they just won't highlight it. >> you can put that in six-point print at the bottom. >> if they cut a small number,

start reducing a small amount, i don't think that will shake the parbgts. i know they are debating how to slowly taper this down. >> they need to increase clarity and reduce transparency. >> yeah. >> if you don't inject. nobody can guess the end game or the exit will fail. >> it's a tricky dilemma. listen, we have talked so much here. it's not a great example or analogy. but you saw jpmorgan get too big. that was a very illiquid market. this is an extremely liquid market. still they have to be very, very careful. back to the u.s. deficit. they don't want to do anything that will cause any shock to rates. that will effect everything else. so this is tricky.

we have not been through it in our lifetime. there's no textbook for how to do this. >> drew, michelle, thank you both very much. robert, of course is going to be with us the rest of the program. >> it's not special if it's on the air. >> i need the special phone come. >> up next, celebrity chef bow bostianich and mario balotelli. adp private payroll on wednesday. initial claims and productivity on thursday. big granddaddy of all,

employment report for april will come on friday. but we're going to kick things off at 8:30 with personal income and spending numbers. it is predicted to rise 0.4%. spending to remain flat. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. omnipotent of opportunity.

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welcome back to "squawk box", everybody. futures are indicated higher. in fact, we have seen a little bit of ground gained over the course of the morning. s&p futures up by almost five points. in our headlines, merck and pfizer. type two diabetes currently underdevelopment at pfizer. it is set to have been phase 3 clinical trials later this year. also j skr pjc penney loan deal imminent. it is an important stop to strengthen financial position. obviously that company has been burning through a lot of cash. new york city is home to some of the most vibrant restaurant scenes in the world. that's two stars to get a better

read on the urban culinary climate. mario balotelli co-owns restaurants across the globe. mario's partner in crime it says is -- >> my favorite in the whole city. >> joe bastianich. he's on competitive kaobing shows like master chef and master chef italia. good morning. >> thank you. i'll let andrew has some personal issues to discuss later. but i guess the thing i want to get is can you -- the luxury consumer in new york city, how do you grade it on a scale of 1 to 10 on where we are right now with banking bonuses not what they used to be. wall street is coming back.

are we in the heydays again? >> i think it's a new world where there's a different kind of financial expectation both from the restaurant and from the consumer. andeer just trying to match all of them. we have everything from inexpensive place like a pizzeria to a four star. being able to play on all of those is a big part of it you can see it in wines sometimes. some of these guys would buy a $1500 wine in the past. now they go for 200. do you see any trading down in the wine area, joe? >> i think that the middle ground maybe disappeared. i think at the top end people are drinking the greatest in the world. there's a market for them. the new york marketplace has become more global. we see consumers from asia, from south america, all kind of searching that experience. new york is the greatest dining city in the world and has some of the best restaurants with the best food and wine available. so i think that it is still here

on the top end. people come to new york to have the incredible restaurant experiences. >> you guys are all over the place. chicago. even singapore. i was thinking about how hard it would be to do if you didn't have the big rep if you were going there and if people didn't know what you were. the multimedia aspects, there's a method to your madness, right? >> well, it gives us a soapbox to stand on. fundamentally joe and i really invented much. what we love to say, we love the culture of the table of the italian people. when we do that, it takes the pressure off to reinvent the new wheel. we still bring spaghetti to the plate and it's still delicious. >> i still want you cooking my food. you can't be in every restaurant. how do you get people to make food that you can serve

yourself. >> i'm in all of my kitchens all the time. but all the people that work with us, we have never hired an executive chef. we hire prep cooks, line cooks, line waiters and they eventually become the head chefs, wine directors and service directors. working with us hand in hand they generally can do what we're hoping for them to do. to find their own hard but be an expression of the deliciousness of the italian culture. >> what do you make of all of these different tv shows. it's not just a function of all the restaurants that you opened. we should talk about how to get a reservation. >> but not now. >> there are so many people now trying to do what you're doing. and i just wonder how long your restaurants have clearly held up. but some of these others have not. >> i think it comes down to the fact of whether you provide

value. it has to be delicious, at a fair price and perceived in the right realm. that's hopefully what we will continue to do. at the end of the day you have to deliver it day in, day out consistently from the beginning when you open the door until the end when you close the door. that's what it comes down to. consistent and detail. >> how much do you worry about -- i don't think this is a circumstance in your case at all. some other chevrolets who spent so much time on tv, you say are they behind the restaurant or not? >> well, that's a question everyone has to ask themselves. they get an opportunity to meet a lot of new occurs. they may come in and find out whether or not they can deal with what you have to say. >> joe, is it tpufr these days to parade with the bloomberg administration and the changes they tried to put in place in terms of trying to make sure people are eating healthy? >> i think definitely there's a new standard that's being put forth by the new york city

government. but i think ultimately these type of restaurants and great restaurants are all about sourcing food in a responsible way. and we very much are supportive of the rules and regulations. whether it's the health department regulating restaurants. anything that makes the dining experience better. new york is a platform. people come. and any time they eat in a restaurant it reflects on my restaurant. so i want the standard to be held as high as possible for every restaurant to be delicious, clean, fun, ultimate there a great experience. that keeps people coming back to new york and going out to restaurants. >> i have had friends that invested in restaurants. it seems like if you pick a way to get rich it's not the great e. you have been a restaurant guy your whole life. you are going to do restaurants either way. do either one of you have people that keep something dear, that keep a velvet rope out there?

is there a way to do that, to control the supply so you can almost gain the demand? how do you keep your restaurants so dear? do you think that b that? do you turn people down on purpose like me? >> absolutely not. the secret to getting a reservation is to walk in without a reservation. if you smile and say, listen, we don't have a reservation, but we want to come in. >> will you remember andrew's name or my name? can i drop your name? any secret that i can get. >> it's all about the smile. your picture will be on the inside page of our reservation book. >> your picture is there to not let you in because of the way you tipped last time. >> babbo is a favorite. >> please come back and join us

again. and maybe we'll try. god, i hate rejection. maybe we'll try sometime. >> thanks, guys. coming up, personal income and spending numbers for march are hitting the tape at 8:30 eastern. that and more at the break. we went out and asked people a simple question:

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. welcome back, everybody. we are just a few second away from personal income and spending numbers for march. rick santelli is standing by. steve liesman is back on the set. rick, we'll let you take it away if you can give us the numbers. >> survey says, personal income for the month of march up 0.2. spending matched that increase. also up 0.2%. the first in the form of income is less than expected. the latter in terms of spending is more than expected. and if we look at deflators on month over month basis, pretty much matched estimates. and is half a percent lower than our last look. if we look at the same comp on i a year-over-year basis it is actually up 1%, which exactly matches expectations. and is about 30% lighter.

our last look at 1.3. to summarize, it isn't bad data. i would rather see of course the the income continue to go up. and at least it's up in some fashion. but remember, last comment, february's income up 1.1. and this is a march number. we have had with our first look at first quarter gdp. this may point towards some revision pressures in three weeks when we got our second look. 1.31.06. on the euro versus the dollar. and 1.55 pound verses the dollar. dollar/yen, we never touched 100. we're actually 97 handle. a lot of currency action going on. back to you. >> steve, what do you think of the numbers? >> i like seeing wages and

salaries. i like the consumption was a little better than expected. it leaked to the saving rate of 2.7%. it settled down 2% to 3%. it was negative during a lot of boom years. there's been a lot of talk about where that savings rate was going to settle down. it may have touched 6. when things get risky and things start to get nervous the savings rate goes up. now it settles down. part of the change in the payroll taxes is perhaps coming out of savings. over time, though, people should decide, this is the theory anyway, if it's permanent they have to adjust their savings and spending to that level. >> negative savings rate obviously stinks. it hurts the economy. >> a lot of the telegencia think

they know what the right level of savings is for people or what the right level of deficit or debt is. i don't know. and i would not dare to tell people you should save more or less. you should be aware of the consequences of your actions today on your retirement tomorrow. but if the general public in america feels saving 2.7% is the right number today, i'm not the right person to say if it's right or wrong. people pass judgment without any basis. i did want to point out, though, there will be the doves on the committee. fmc will look at this 1% price index and point out we are misching on the unemployment targets and we are also missing and missing padly and missing at an accelerated rate on the target as well. they will justify it on both sides of the equation.

>> i was listening. but now i have a number. >> they have so much cover. they have double cover. cover implies well i'm using it as a rationalization. they will say there's a reason. >> it's cover if they can't get out. >> if we have a hard time extricating ourselves from this extraordinary qe that we have done, they will say i had to do it, right? >> you're saying ex post. i see. okay. >> i agree with steve. they're going to keep going. one thing that happens is improve will home prices and improving stock market. if i think what stocks i do own are higher and my home is worth more. >> you're worried about the end. you're worried about getting out. >> the fed policy is trickling its way through this economy. and we shouldn't take it for granted. we're sort of getting used to this is the new reality.

but we have to remember a lot of this is still due to fed policy. >> you make that point. it could be difficult. >> we're going to learn about it. >> i want to make rick's point for him. this is exactly his point. and i think there's something to it. they are not taking it for granted. if the problem with the market right now, the problem with investment, though, is that they believe what's happening now is artificially generated by the federal reserve. and it's not something i can rely on. i will point out the fed is going to pains to say, yes, you can rely on it for a long time. but the extent to which the market believes them why they don't may be in why expectations are so low. >> in terms of starting to go really get out of the way on this. but if the fed announces it's going to be tapering, it's not based on economic numbers. but when they do announce they will taper things off, is that

as clear a signal as get out entirely the market. how does the market react to tapering versus just ending? >> the market will have the same responses entitlement recipients have when you talk about tapering their benefits. >> so saying one thing is basically the same thing? there's not an easy way? >> special instructions on this trading for the day the fed announces a taper they will have a stretcher to carry me out. i'll have a heart attack the day they actually announce it. >> rick, please take care of yourself. no one wants that. >> i don't see it. i don't see a taper. i don't see any good way out, steve. they're going to say they're going to hold their position forever but i don't think that will work out well either. >> the question as to purchasing assets, i think it seems pretty

clear that the fed will eventually, when it decides to ultimately end qe, will do so through a tapering process. it has ended quantitative easing in the past. it has ended two of them before launching this third one. and the question is how will it end? and it still becomes a market question, rick, in the sense that the fed will do so ostensibly in the lower employment numbers. it becomes a trade-off. do you sell because the fed is not providing the answer or are you a buyer or neutral because the economic numbers are better? >> or are you in the general public and you avoid the market altogether and you say, what the heck are they doing? >> before we go, do you know sina? it's up 9%. >> they're not my friend. >> it's like twitter and

facebook supposedly in china. >> why is it up 8 bucks. >> an alliance with ali baaba. they will use resources to become bigger as a social network. the possibility of buying even more. >> i'm not on. >> that's a huge gain. it's every other stock that goes by. what would a combo twitter/facebook thing do, do you think? >> it's a combination of the two. >> it would be a killer, which is sort of what this is. >> we have to get over to phil lebeau with breaking news on chrysler. >> good morning, andrew. chrysler out with first quarter results. lower profit compared to last year. not completely unexpected given the fact that they have vehicle launches, lower shipments. shifting more towards cars.

chrysler earned a profit of $435 million. that compares with 740 million a year ago. net income, 166 million versus 473 last year. revenue down 6%. a billion dollars going from 16.4 down to 15.4. two important notes in the earnings season. the ceo confirming that they plan to deliver between 2.6 million and 2.7 million vehicles this year. that's important. people want to know they're going to stay above that 2.5 million vehicle target he's already thrown out there. second of all, on the conference call, there are going to be a lot of question about chrysler is putting together a plan to buy the remaining 41% of the company. that's part of the trust. and then ultimately take chrysler public. those are going to be points watched on the conference call. a lower quarter. >> phil, thank you.

so we're on sina. >> no idea. >> there's video. is it a mcdonald's ad. >> can we get a camera over here? this is sina. they have a picture from the washington correspondent's dinner of president obama. >> so it's a social media website. there it is. it is above your screen again. sina. it's an alliance with ali baaba. >> looks a little like yahoo! to me. it has a lot of news on there. a lot of ads. they're doing well on the advertising department. but the mandarin is a problem for me. it's not even letters. >> they have a translation? >> they don't do any translation. >> the wonders of google. this is going to hopefully turn it in -- no way. >> sit trying to.

>> edison's desire to sina gift ideas. >> obama showed explosive audience laughing with his wife. >> so the translation is fun. a little off. >> disruptors continue with venture capital firm because you were just in. this is a venture capital firm. >> always a huge deal. joe lonsdale. [ female announcer ] what if the next big thing, isn't a thing at all?

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welcome back to "squawk". disruptors continues with a "v" c fund partner behind several companies for the public and private sectors. joining us is joe lonsdane of formation 8. it's not that new. they recently raised half a billion dollars. and co-founder of data mining programs to map out human social networks and identify terrorist networks. some of this is used by the cia and probably the bombings in boston. >> yeah. they were probably using it there. >> when they use it, by the way. i want to get into this. you are pairing or allowing government agencies to start looking through their data so

they can actually pinpoint who is related and how they are related. >> for him to understand the data they're collecting. it's really hard for them to put it together to collaborate. there's a thousand different boxes everyone controls. how do you sit in the middle. there's all this information. and how you expose it to the people who have access when they need stpwhreut what did you do? >> it's an information problem. you get the very best scientists. how do we put it into the forms that will give access and how do you expose people. >> how much is a technology versus consulting issue. someone has to walk in, look through the data and understand what they can do with it, let alone the technology of being able to measure it. >> that is one of the big themes. you're taking what used to be

consulting problems. you're taking something that used to be a service industry and out of the box solving the problems. >> talk a little bit about the issue we were talking about off cam remarks which is some of the businesses you're investing in now are finally really actually starting to hit the financial services industry for the first time. so spent a lot of time on consumer businesses. now you're starting to see some of this come towards wall street. >> it's a really fun thing that's happening. if you go back 30 years, most of what we do is work on the enterprise problems. all the technology was built a few decades ago. and for the first time you have this explosion of data. so in ard for the industries to function you need people to access it. >> is that something that disrupts the big players like an ibm? we saw ibm earnings.

they stunk. stocks holding up sharply. is that because they are unseeded. >> for the first time you're having a lot of top talent from the top 15 or 20 tech schools starting to pay attention. that's being done by private small companies as opposed to big companies. >> the top talent from stanford isn't going to google or facebook. they're looking at these hard-core businesses that they ignored before. >> there are four public companies that get top talent. amazon, apple, facebook, google. the rest are going to private companies now. if you want to innovate in big industries, you will see it coming from the private sector. >> how do you figure out what each of these industries need? do you interview people who use this data? how do you tailor it? >> i think it's mostly outsiders that create the innovation. for example, when we were

billion in 2004, 2005 i think i did 25 round trip flights back and forth to d.c. >> give us an example of how data is being impacted. >> there are a lot of businesses. i think finance. there's trillions of dollars mortgage backed securities. do we foreclose on this. how do we deal with this data. and to be able to bring all of that together, what's happening in the housing market and making one off decisions. that's saving billions of dollars. >> should we worry that the computer is making these decisions. >> it's not the computers making the decisions. it is the computers exposing to analyst toss make the decisions. there's this thing we talk about. certain things computers are better at and certain things people are better at.

>> give us one hot company we're not paying attention to. >> well, there's a company addepar. i think in all these industries the people who build the platforms for the first time bring it together. it will run the industry going forward. coming up, stocks to watch. cripple cramer will talk about it. [ penélope ] i found the best cafe in the world.

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♪ nespresso. what else?

jim cramer joins us now from the new york stock exchange. i don't know where to start. i guess tebow's been waived. >> nobody wants him. the eagles have ten quarterbacks to try, why not go to the eagles? >> who was your big -- who was the person that you were most existed about on saturday night? >> katy perry which you got her picture and secondarily bradley cooper who came up to me and wanted his picture with me,

except for the fact that we were taking a picture. >> and michael douglas wanted to know whether you use a teleprompter and how do you know all those stocks. >> i thought that was terrific and michael douglas came up to me and wanted to know. what's the secret to "mad money." you can come and see the secret cause, but i'm not revealing it at the cocktail party. >> i guess he was being michael douglas because gordon gecko. >> he is the best there is. these are star-blinding night, and i know that you tend to think that you can be jaded and then you go to that event and -- no, i'm sure the president's looking out there and saying i can't believe who came to hear me. >> exactly. >> we were talking about brokaw earlier, and i mean, worry about -- there seems to be bigger things to worry about than people having one night a year. i have jimbo on my side. were you on my side on that?

>> i had a great time so i'll stick with you on that for now. >> i still think they need to raise more money for the issue. >> that's why you wrote such a big check that night because you were able to. >> i was thinking of writing a check. >> no, i haven't done it yet. >> i saw you thinking about it. i did. for a success you were thinking seriously about it? >> you know what? when the show is over i'm going to write a check. >> why don't you give them the money -- >> i gave you a there are a page. >> you didn't give me the full amount. >> i wanted -- >> the appendix counts. >> sorry, jim. so you saw the stuff about revenue. revenue growth is nonexistent and the market keeps going up. >> well, look. i think one day you get revenue growth and the market will be a dow 17,000 and we'll say why did we wait for that? we should have bought it on earnings. you go through it and some

companies are overvalued, proctor versus google. okay, fine and people want yield because there's nothing going in the fixed income market. what with else was i going to talk about? china, those numbers were -- i looked at what china's industrial was up 17% for the first two months and then 5% in march. >> that'serible. >> and that's what ge said about europe and both of those things really slowed down, it seems like, in march. the progression of the months was terrible except for in the united states with domestic companies are pretty darn good, except that march was a rear weather month. >> you want a table at bob-o. andrew has a new friend and number. have you eaten there? i can't get in until andrew got the number, and now i can get in. >> come on, andrew, get me in. >> we'll see you in a few minutes. >> you don't have the number?

>> when we come back, our guest host this morning has been robert kaplan from harvard business school. we will give him the last word when "squawk box" returns. is our business. we've reduced taxes and lowered costs to save businesses more than two billion dollars to grow jobs, cut middle class income taxes to the lowest rate in sixty years, and we're creating tax free zones for business startups. the new new york is working creating tens of thousands of new businesses, and we're just getting started. to grow or start your business visit thenewny.com a brand new start. your chance to rise and shine. with centurylink as your trusted technology partner, you can do just that. with our visionary cloud infrastructure, global broadband network and custom communications solutions, your business is more reliable - secure - agile. and with responsive, dedicated support,

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>> the stock of the day, sina says that ali banna has bought an 18% stake in the microblogging service for $586 million and weibo. >> if you remember weibo in "the wire." >> i didn't see it. i tried to become a webo in the scouts. >> robert kaplan, what is the last word? do you have something to leave us with? >> so i teach leadership so i'll give the last word on leadership. leadership as i define it. do you figure out what you believe? do you have the guts to act on it in a way that it has a positive impact on others and i spend most of my life working with leaders and writing business to do that, and what i found is if you're going to try

to do that and have the guts to act on it. it's okay to say i was wrong, but the most important person you probably have to understand is yourself. n't forget that. >> you have to understand your wife, too? >> happy wife, happy life. >> yourself second. >> relationships matter. >> i like this message. >> robert, thanks a lot for coming in. >> thank you. >> right now it's time for "squawk on the street." ♪ ♪ ♪ >> good monday morning. welcome to "squawk on the street." carl quintanilla, jim kramer and david faber. 130 s&p earnings and two central banks including the fed, a jobs number, you name it. futures reacting to personal spending for march which was better th better than expected. europe's up as well and it does form a coalition government with enrico letta, the new prime minister. our road map begins with a slew of rea